CFAC to get more power
The Bonneville Power Administration announced Monday that it would supply up to 140 megawatts of electricity to Columbia Falls Aluminum Co., beginning late next year.
The deal, which still has to be signed into contract, would run through September 2011.
CFAC has been operating just one of its five potlines for more than two years, initially because of high power costs, but more recently because of an imbalance between raw material costs and finished product prices.
As of last fall, the company employed about 150 people. At full capacity, it uses about 345 megawatts of electricity.
Consequently, Monday's announcement would provide almost enough power for the smelter to run at half-capacity.
General Manager Steve Knight could not be reached for comment regarding the implications of Bonneville's offer or the likelihood that production would increase.
In recent years, however, the company has actively lobbied for more federal power. Bonneville currently supplies all of the electricity used at the plant, and Knight has previously indicated that access to the agency's lower-cost hydro-power was critical to CFAC's continued operation.
Monday's announcement indicated that Bonneville would make 577 megawatts available to three aluminum smelters and one paper mill.
Besides 140 megawatts for CFAC, up to 320 megawatts would be reserved for Alcoa's Ferndale, Wash., smelter. Another 100 megawatts would be available to the Golden Northwest smelter in Goldendale, Wash. The remaining 17 megawatts would be for the Port Townsend Paper Co. mill.
The agency didn't indicate what the contract price would be. However, it said it would allocate up to $59 million per year to subsidize the price that the aluminum companies pay, to bring it down closer to what public utilities and cooperatives (including Flathead Electric, which receives about half its power from Bonneville) are charged.
Bonneville said the industrial customers would never pay less for electricity than the utilities pay.
"This was a very difficult decision," said Bonneville Administrator Stephen Wright, in a press release. "We've worked hard to balance the regional interests. We believe the agency is striking a balance between the need to keep costs as low as possible, and the chance to support jobs" by providing a limited amount of power to its long-standing industrial customers.
If all 577 megawatts are used, Wright said pay about a dollar more per megawatt-hour than they would pay if the industrial subsidy wasn't in place.
The agency currently charges utilities about $30 per megawatt-hour.
Wright said the next step is to finalize the power contracts, in preparation for an early 2006 signing.